US and China exchange new trade war blows as latest round of tariffs takes effect

September 24, 2018

The latest round of tariffs targeting U.S. and Chinese goods went into effect Monday, raising the stakes in an escalating trade war between the world’s two largest economies.

President Donald Trump’s administration levied tariffs of 10 percent on $200 billion of Chinese products that include furniture and appliances, with the rate set to increase to 25 percent by the end of the year. It is Washington’s third tranche of China-focused levies and part of a strategy to pressure Beijing into changing trade practices that Trump has claimed hurt American companies.

In response, Chinese President Xi Jinping’s government said it would impose taxes on 5,207 U.S. imports worth about $60 billion. Products such as liquefied natural gas, coffee and various types of edible oil will see a 10 percent levy while a 5 percent tax will be imposed on items such as frozen vegetables, cocoa powder and chemical products, Beijing said. …

Hours after the new tariffs took place, Chinese state news agency Xinhua accused the U.S. of “trade bullyism.” The media outlet also said Beijing was willing to go back to the negotiating table with Washington if discussions were “based on mutual respect and equality,” Reuters reported. …

U.S. Secretary of State Mike Pompeo told Fox News Sunday that his government was “determined” to win the trade war.

The Trump Administration basically believes that the Chinese have the most to lose in a trade war.

I suspect that the Chinese are hoping for loss of Republican control over one or both houses of Congress to assist their side.

Irrespective of US midterm elections, the Chinese are also working on their Silk Road project, trading with Iran, and are trying to work closer with the Europeans. The Chinese, at this stage, must be more willing to acquiesce to European standards, etc. as they must believe the EU is easier to deal with than the Trump Administration.

Trade will be a factor in what can be called World War III–and this war will be a conflict with Europe (but the ‘shooting’ aspect of this will not happen before 2022; for some details, see When Will the Great Tribulation Begin?).